Top 10 Scams
1. INTERNET FRAUD
The Internet has become the new medium for almost every scam. It provides opportunities for legitimate businesses and consumers, but it also hosts fraud artists running investment scams, fake business opportunities, fraudulent auctions, chain letters, and pyramid schemes. The tell-tale signs of fraud are high pressure sales tactics, business asking for payment by private courier instead of regular mail, companies that don’t have street addresses on their websites, and stolen online seals which are not clickable like the BBB Online Seal, for instance. Check out web businesses just as carefully as you would any other business, and always check out the security and privacy policies of websites. Look for the letter “s” (denoting “secure”) following http in the website address and unbroken key or padlock symbol to ensure it is secure. The “https” and the unbroken padlock will only appear on the page that requires your personal information.
2. IDENTITY THEFT
Identity theft is the fastest growing type of fraud in North America. The Council of Better Business Bureau s in Canada estimates identity theft costs $2.5 billion a year to consumers, banks, credit card firms, stores, and other businesses. Project Phonebusters, a national call center targeting fraud crimes, reported more victims in the first 9 months of 2003 than all of 2002 combined. ID thieves can, and do, use all sorts of tactics to take your personal information: by looking through your garbage or recycling box, pretending you need to provide such information in order to claim a prize or lottery winning, stealing your mail, placing bogus newspaper ads for jobs locally and internationally, sending unsolicited emails posing as your financial institution, etc.
3. NIGERIAN LETTER SCHEMES
A classic “get rich quick” ploy, this scheme has been perpetrated worldwide and frequently targets small businesses, churches, and other non-profit organizations. It starts with a letter, fax, or email from Nigeria marked “urgent” or “confidential”. The sender claims to be an official of a company or government ministry who is trying to transfer millions of dollars out of the country. The letter writer proposes depositing the money in a trustworthy bank account in exchange for 30 percent or more of the transferred funds. To get in on the action, the business, consumer, or organization, must provide its bank account number and other company information. When that information is provided, the business or individual is then asked to start sending large sums of money to cover the transfer of funds, the payment of taxes or the bribing of Nigerian officials. Of course, the millions of dollars do not exist, and the victims eventually end up with nothing but loss. This scheme has also been originating from West Africa, Sierra Leone and South Africa.
4. FOREIGN LOTTERIES
In this scam, victims learn they have won a foreign lottery, such as the Australian 645 or the Spanish El Gordo, but must send money to cover “taxes” or other “fees” before they get their winnings. Victims will also be asked for bank account or credit card numbers. But instead of depositing money, the scam artist will make withdrawals or run up charges on credit cards. Alternatively, consumers learn that they have “won” the opportunity to purchase foreign lottery tickets. This usually involves paying a fee in order to remain eligible for promised winnings or victims will be asked for personal information and a signature for “verification purposes”. In fact, there is no lottery and there are no winnings. The perpetrators of this scam want your money and your identity.
5. WORK-AT-HOME SCHEMES
This scam preys on people who want a home-based business. The fraudulent business sells kits to would-be home entrepreneurs who make the products, but does not buy the completed work because the product “is not up to company standards”. Another version of this scam is the envelope-stuffing scheme in which a company promises high wages to people to stuff envelopes. What usually happens is the participant must buy the company’s books on moneymaking and pay for advertisements in newspapers, magazines or on bulletin boards. The envelope-stuffing scheme is in fact a chain letter, which is an illegal pyramid. The participant will spend money rather than earn it.
6. BOGUS CHARITIES
Watch out for bogus charities using names similar to legitimate ones. Ask all fund-raisers for identification and inquire how much of your donation actually goes to the charity. You can check whether a charity is registered by calling Canada Customs and Revenue Agency toll free at 1-800-267-2384 or check out its website at www.ccra-adrc.gc.ca. Don’t make donations over the phone or at your door; ask the organization to mail its information package to you. Legitimate charities don’t use high-pressure tactics to collect donations and will be happy to comply. Be particularly careful after disasters, as there will be a variety of relief efforts responding to the diverse needs of disaster victims. Be wary of appeals that are long on emotion but short on what the charity will do to address the specific disaster.
7. UNSOLICITED EMAIL AND MAIL
Consumers have complained about the rivers of unsolicited mail that flow to their doors. Now, thanks to the electronic age, they are receiving junk emails (spam) as well. To avoid spam, make sure that you read a website’s privacy notice before giving out your email address. Exercise any blocking tools that might be offered by your Internet service provider and email service. Consider setting up two email accounts (for public and private use respectively). Use discretion when making public posts on the Internet that divulge your email address. To help eliminate spam, register your email address on this website: www.e-mps.org.
To stop receiving un-addressed ad mail, notify Canada Post by placing a written notice where you receive mail requesting that no further junk mail be delivered to your address. To stop receiving addressed as mail, contact the Canadian Marketing Association at 1-800-267-8805 or online at www.the-cma.org and request that your name be removed from the telephone calling and mailing lists of member companies.
8. HOME RENOVATIONS
When you are thinking of having any home improvement work done, it is advisable to obtain at least three estimates from contractors who have permanent addresses in your area. Estimates should be in writing. Be wary of quick estimates and high-pressure tactics. Ask for names of two satisfied customers and check with them. Ensure that the company is in good standing with the Workers’ Compensation Board, is bondable and has third party liability insurance. Get a contract written on the company’s letterhead with a complete and detailed price quotation. Read the contract carefully and do not sign it with sections left blank. Remember, legitimate home renovators do NOT solicit door to door.
9. UNSOLICITED INVOICES
Every year, businesses receive “invoices” for goods or services that they have not ordered. What they receive resembles an invoice. It is, in fact, a solicitation for advertising. You are not required to pay anything unless you wish to participate in the offer. In many cases, these look-alike invoices are paid by unwary accounts payable personnel. Be sure to educate your staff to recognize solicitations in the form of look-alike invoices. As well, be sure your payables system has at least two people to authorize any payments so that they can check each other.
10. OFFICE SUPPLY SCAMS
There are companies that will occasionally contact businesses, representing themselves as the regular or new supplier. They will contact a receptionist, a temporary or new employee and, after getting a name, may send you merchandise and/or an invoice for placement of an order. Instruct your employees not to give out product names or model numbers of your office machines over the phone. These calls should be referred to your authorized purchasing agent. You should appoint and familiarize one person to purchase supplies and use purchase orders. Your purchasing agent should become familiar with your suppliers and the companies with which you have service contracts.
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